The Changing Workforce

The growth in inequality in the United States over the past few decades has many sources. A significant one is the changes in the labor market. First, movement from a manufacturing economy to a service economy eliminated many decent paying jobs that didn’t require much education. Unions systematically lost ground in part because of this trend and because of government efforts to curb their influence. Now more and more workers (even in manufacturing) are temps:

During the 1990s, employers were developing an insatiable appetite for short-term labor to cut costs and respond to fluctuating demand. In the early 1980s, employment in the “temporary help services” industry—which covers both temp workers and employees of the firms that supply them—stood in the several hundreds of thousands. Now it’s 2.5 million, a seven-fold increase in less than four decades. By 2020, the BLS foresees more than 440,000 new jobs in the sector.

In the meantime, the temp craze has expanded from air-conditioned offices to warehouses and construction sites. In 1990, a year after Labor Ready was founded, clerical workers made up 42 percent of the temp workforce, with blue-collar workers comprising about 25 percent. By 2000, the numbers were flipped, a phenomenon driven by the outsourcing of American manufacturing jobs. In 1989, according to a forthcoming article in the Industrial and Labor Relations Review, only 1 in 43 manufacturing jobs were temporary. By 2006, 1 in 11 were.

Temporary jobs, are less safe, pay less, and don’t provide health insurance. The workers in those jobs won’t be able to give their kids the chances, that working class parents could a generation ago. This defies easy solutions but unless we come up with some, a permanent underclass will be a reality.

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.